We are living in an age of diminished expectations when it comes to Irish sovereignty.

We have the spectacle of the Minister for Finance wearing the wings off the state jet buzzing by Europe's centres of power to secure the right to pay less interest on debts the Irish state should not be shouldering in the first place.

Michael Noonan should not content himself with knocking €400 million off of an estimated €1.6 billion of interest costs per annum - he should go for the big wins and knock tens of billions of odious debts from the backs of the Irish taxpayer.

The Irish taxpayer has paid vastly more per person than anywhere else in Europe to bail out banks and, eventually, a broke sovereign.

Many commentators - included the highly-respected Colette Browne of this newspaper, and the Financial Times - have adopted this line of argument recently. In the round it is a view I share, while being ultra-pragmatic because of the needs of the State's citizens in the short term.

We should not have to pay many of the debts the Irish state has incurred in the last few years. There is no moral obligation to honour odious debt. But successive elected governments have decided to honour these debts. Austerity has been a horrible policy failure, but successive elected governments have decided to pursue these policies.

At the European level, given the stark reality of no deal forthcoming on the retrospective recapitalization of the State's stake in our banks via the European Stability Mechanism, the deal to re-finance the IMF portions of Ireland's assistance programme was the only one on the table short of pushing to default on large parts of our debt, which would be contrary to any of the policies Mr Noonan has pursued to date.

Despite this really being a change of lender more than anything else, this deal has real teeth and will have a practical impact on the State's finances and budgetary calculations for the next few years.

Let's not blow it out of proportions, essentially the Irish government will borrow more in the private market at low rates of interest, and pay off some of the loans outstanding to the IMF, our most expensive international creditor.

Repaying only one creditor early required securing the agreement of our other creditors, and Mr Noonan and his team have succeeded in getting these agreements.

They have done the State some service, and Mr Noonan will be remembered for it as someone who changed the direction of Ireland's public finances.

Combined with the modest uptick in the number of people in employment, plus slight bumps in retail sales and with government revenue from taxes ahead of target by about 0.6pc of national output, with primary expenditure about where they expected it to be, things are looking good domestically.

A return to some measure of fiscal stability across the major sectors of the economy is taking place. This is not a boom, or even a bubble.

The Irish economy is bouncing along at a level about 80-85pc of where it was at the peak of the bubble years.

Last year, demand for goods and services fell by 0.6pc, and this year, for the first time in years, we are seeing things improving. In the forthcoming budget Mr Noonan has clearly signalled a cut to put money back in the pockets of some workers.

We know expectations for disposable income growth are the key factor driving consumer spending over the short term, so this tax cut should help increase demand for goods and services, even if it makes the State's finances more fragile in the process.

Inflation is also very low, both in Ireland and across the Eurozone, suggesting that there is a chance of a deflation - or a general drop in the price level - occurring across the Eurozone.

Deflation is a threat for a deeply-indebted Ireland and her weakened national finances. We are still fragile to shocks from the international economy, and any recovery could evaporate should the international economy experience a meltdown.

In the policy arena, and at the European level, measures to combat deflation, including large-scale asset and bond purchases by the European Central Banks on the order of €500 billion, will only help Ireland's cause, spurring demand here, changing exchange rates to make our exports more competitive and helping to heal the damaged balance sheets of Ireland's banks. That said, the European Central Bank has publicly quashed the idea of "cash for trash" policies where highly-risky assets end up getting transferred onto the balance sheet of the European Central Bank and left there.

The risk in those assets then transfers explicitly from the private bank to the European taxpayer. Europe's leaders have seen what such transfers did to Ireland, and they are keen to learn from Ireland's experience. The signal from the ECB is that national banks can keep the really rubbish assets they have while partaking of the large-scale buying programme to help themselves heal.

Banks' balance sheets are being helped to heal. Government's balance sheets are being helped to heal.

But households are not getting the same treatment, especially in Ireland.

Ireland's households have some of the highest debt levels in the developed world, and the number of households in arrears is still alarmingly high, with applications to the Insolvency Service very low, it seems households are being asked to shoulder any recovery in their fortunes on their own.

Why should they suffer while the bankers are back in business?

This inequity is, I think, what drives many commentators to dismiss the debt deal Mr Noonan secured, unless he and his team find a way to pass those savings directly on to those most in need.

Those at the lower end of the income and wealth distributions need to benefit from a deal done to right the public finances.